Recombination between related, repeat elements within the genome may lead to alterations in adjacent sequences or translocations. We are investigating mechanisms and genetic control of recombination between diverged DNAs in bacteria and the model eukaryote, the yeast Saccharomyces cerevisiae. With E. coli we are addressing questions of how mismatch repair systems (MMR) prevent recombination in terms of acting prior to or during the formation of hybrid DNAs. Two types of hybrid molecules are prepared in vitro using diverged DNAs and transformed into wild type and various mismatch deficient mutants. Two results, high plasmid survival and preferential loss of the tailed strand, suggest that the MMR system prevents recombination by acting at the strand exchange step, probably by excision of the invading strand. We propose that the very low recombination frequencies observed by other investigators in conjugation experiments involving similarly diverged DNAs are due to preferential loss of the invading strand during heteroduplex formation. Using yeast we have examined the role of mismatch repair system in recombination between highly diverged (28%) molecules. This recombination appeared to be facilitated by specific DNA organization (inverted repeats) and by altered replication due to a mutation in the DNA polymerase delta polymerization domain. Both factors acted in a synergistic manner causing together as much as 1000-fold increase of homologous recombination. Mismatch repair was unable to prevent homologous recombination. These observations follow up on those of the previous year where we suggested a novel mechanism for the involvement of replication in double-strand break induced recombination between diverged DNAs.